Bitcoin, the digital currency that has been making waves in the financial world, reached a significant milestone on Wednesday when its price hit $100,000 for the first time. This surge comes in the wake of an election that saw victories for crypto-friendly candidates led by President-elect Donald Trump. Since November 5th, the price of bitcoin has seen an astonishing increase of more than 45%, and year-to-date, it has more than doubled. This six-figure mark is just the latest in a series of lucrative achievements for a currency that emerged 15 years ago from a brief whitepaper written by an unknown author, Satoshi Nakamoto. The ideas laid out in that paper have spawned an entire technological landscape dedicated to peer-to-peer transactions, including hundreds of other digital tokens, NFTs, and trading platforms.

Controversies and Challenges

Despite its remarkable growth, cryptocurrencies have remained controversial. Many, including bitcoin itself, have been linked to a rise in cybercrimes and scams. The FBI estimates that such activities were responsible for billions of dollars in consumer losses last year. This has prompted current federal regulators to adopt a skeptical view towards many cryptocurrency efforts. However, bitcoin advocates are hopeful that a new pro-crypto stance will take hold in Washington, ending strict regulation and enforcement against digital tokens. They envision a future where bitcoin investing is accessible to traditional financial institutions and where mining bitcoin becomes more profitable through increased energy production.

Trump's Crypto Interest

Trump, who was once a crypto-skeptic, has shown interest in creating a U.S. bitcoin "strategic reserve" modeled after those for gold and oil. During his third presidential run, he attended this year's Bitcoin Conference in Nashville, Tennessee, where he praised the crypto community for its innovation and vowed to make the U.S. the crypto capital of the world if elected. This shift in attitude could have a significant impact on the future of bitcoin.

Price Volatility and ETFs

Bitcoin's price movements are notoriously volatile, and experts believe that this is unlikely to change regardless of who is in office. However, in recent times, a large share of the demand fueling its growth has been directed towards exchange-traded funds (ETFs) that track the price of bitcoin and are operated by major financial institutions. BlackRock's iShares Bitcoin Trust ETF is the largest of these, having grown to a value of more than $45 billion since its launch in January. In just the past month, its value has increased by $4.1 billion. In addition to the electoral success of crypto-friendly candidates, Jacobs, BlackRock's U.S. head of thematic and active ETFs, attributes the growing interest in bitcoin to a broader trend. More investors across the wealth spectrum and around the world are seeing bitcoin as a hedge against geopolitical risks, especially currency devaluations triggered by inflation. With ETFs providing an easy-to-use way for investors to gain exposure to bitcoin's price movements, it is only a matter of time before mainstream interest in the cryptocurrency reaches a tipping point. "There's growing interest across the institutional or wealth-management space to learn, but it's always going to be a journey of education, and it takes time for that process to happen," he said.